The dissertation research investigates conditions associated with value creation and performance improvement following mergers and acquisitions in the medical equipment and supplies segments of the health care industry. One emphasis is whether building disease-based product lines via corporate acquisition creates manufacturer value. The focus is on stock price revaluations and accounting performance improvement of portfolio combinations of acquiring and target firms. The seven study hypotheses are derived from three sources: the first four (H1-H4) arise from an industry overview and analysis; the next two (H5-H6) are developed from the strategic management and financial economics literatures; and the final set of hypotheses (H7a-H7c) stem from institutional theory. Specifically, post-acquisition performance is hypothesized to be positively associated with product innovation capability (H1); positively associated with productive efficiency (H2); positively associated with building disease- based product lines (H3); positively associated with economies of scale (H4); positively associated with prior acquisition experience (H5); positively associated with relative size of target to acquirer (H6); positively associated with acquisitions completed earlier in the study period (H7a); negatively associated with acquisitions completed later in the study period (H7b); and negatively associated with conformity (H7c). post-acquisition performance is modeled two ways: (a) cumulative abnormal stock market returns and (b) change iii pretax operating cash flow return on assets. The question of central interest is: which of the competing explanations are most strongly associated with value creation and accounting performance improvement? Ordinary least squares regression (with regression diagnostics to assess multicollinearity, outliers, and residuals) will be the primary multivariate analysis approach. Acquisitions announced during the 12-year period January l, 1984 to December 31, 1995 (n = 241) are investigated. A supplemental analysis using a subset of the data to investigate post-divestment performance of surviving seller organizations is also proposed.